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Master Moose writes with an excerpt from stuff.co.nz indicating that New Zealand's government "wants to override privacy laws to supply the U.S. Government with private details about Americans living in New Zealand. As part of a global tax-dodging crackdown, the U.S. is forcing banks and other financial institutions to hand over the private financial details of U.S. 'persons' and companies based overseas. From July this year, Kiwi banks and insurers will be required to provide U.S. tax authorities with American customers' contact details, bank account numbers and transaction history. The move comes amid continuing criticism of New Zealand's participation in Trans Pacific Partnership Agreement talks, aimed at securing a wider-reaching free trade deal with the U.S. and other countries. Critics say the secretive talks could restrict New Zealand's ability to make its own laws on everything from the environment to employment."

On 23 May 2012, United States Senator Ron Wyden (D-OR) introduced S. 3225, proposed legislation that would require the Office of the United States Trade Representative to disclose its TPP documents to all members of Congress.[77] Wyden said the bill clarifies the intent of the 2002 legislation which was supposed to increase Congressional access to information about USTR activity, but which, according to Wyden, is being incorrectly interpreted by the USTR as justification to excessively limit such access.[78] Wyden asserted:“ The majority of Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of U.S. corporations—like Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America—are being consulted and made privy to details of the agreement. [...] More than two months after receiving the proper security credentials, my staff is still barred from viewing the details of the proposals that USTR is advancing. We hear that the process by which TPP is being negotiated has been a model of transparency. I disagree with that statement.[78]

I thought the EU already did this? I'm sure I've seen complaints from Americans in Europe that they can't open a bank account because the bank don't want the hassle of reporting crap to the US government.

They do. That the US is spreading their net wider and wider is troubling. How much longer before the more middle of the road ex-pat countries get roped into this. Say Mexico, Belize or Costa Rica? Right now our retirees are welcomed down there, but I wonder if that will be the case if this happens.

Basically it's becoming more and more evident that US citizens are being viewed as property by the government. And they want a piece of everything that property makes, no matter where it is.

The best answer is to abolish the income tax. Just that one. I'm not some wacky anarchist-- the income tax keeps everyone in chains. Even if we just made one tax bracket for the "rich", everyone has to report their income and that is where the power lies.

Record numbers of people renounce their US citizenship every year, and this is the reason why.

This is apparently an issue particularly in Switzerland where the local banks now won't touch anyone who is even married to a US citizen (even if they are not themselves a US citizen). Many banks and other financial institutions have also closed the existing accounts of US citizens at very short notice and as a consequence US citizens are now excluded from a large part of the financial services market in that country.

Even if you agree with the concept of "global taxation" of foreign resident citizens, FATCA

Everywhere does this. It's a new US law (google 'FATCA') - all foreign banks have to report account details for Americans to the IRS, or face a 30% withholding tax imposed on any earnings the bank makes from US sources (which given the interconnectedness of global equity markets, affects pretty much any reasonable-sized bank).

Some banks comply. Most simply say "that's impossible/ridiculous/breaches local privacy laws" and simply refuse to do business with Americans. But it's not just an EU thing, it's every

Back when the Roman Empire was THE power, you could cross the Danube into "barbarian lands" or exercise other options for getting away from punishing taxes and oppressive laws of the late Empire. In the American-dominated world, you are rapidly running out of those kinds of options.

Flag-waving morons like you can't accept that maybe America is not acting like the beacon of freedom and liberty that it used to be. There's going to be a day when it is more repressive than any other nation on earth and that day is getting closer and closer, if not already here. Highest rate of incarceration in the world, average person commits multiple crimes a day without realizing it, a militarized police, one of only two nations in the world that claims the right to tax profits made abroad, massive e

Blinded by your outrage at the US, you fail to understand that I'm not defending the constant meddling and overreach of the US government.

I'm merely pointing out that it's no picnic in any place you might decide to 'escape' the US government. Do you think that Putin does not demand tribute and fealty? Perhaps the experience of Mr. Khodorkovsky might be illuminating.

You can still avoid US taxes by moving to another country, renouncing your US citizenship, and not returning to the USA (border controls are even more annoying for former US citizens than for those of us who have never been US citizens, and that's saying something).

They won't let you renounce citizenship if the embassy official thinks you are doing it for tax reasons. Even if they don't think that, they charge a giant "exit tax" and can levy fines for previous non-filings (even if you were, e.g. born to a US parent but never actually lived there).

Basically US citizenship is a modern form of slavery. The scary thing, from my perspective as a non-US citizen, is that once FATCA infrastructure is in place, there's really nothing to stop them extending the list of criteria

The battle cry for starting America: "Taxation without Representation".With a nearly-worthless vote since "representatives" simply won't honor their (non-corporation) constituency, we are right back to the first problem.

After busting your asses for your paychecks, why are you so willing to hand over so much of it to the state?

I live in Canada and I'm quite happy to pay taxes. That's because I get services in return, including free medical care, which is huge. There are some things that simply can't be done effectively by the private sector (education, road maintenance, defense, health care) and I'm very happy to pay the government to do those things. After all, the government is run by elected officials who (at least

If you want to let the private sector take care of education, road maintenance, defense, and health care, then move to some place like Somalia or Afghanistan where that's effectively the case.

After 30 years of communist rule, Somalia was ruled by warlords and Islamists (aka Muslim socialists). The current "internationally recognized" government is secular socialist. Afghanistan was ruled by communists, then unelected Islamists, and now elected Isla

Nothing is free, not least of all when you are obviously paying for it.

I can go to a doctor and not be out of pocket. That's free.

Now as for the taxation cost, that's a hell of a lot cheaper than private systems and better quality, I don't have to worry about the triage nurse having to do a credit check before stopping the bleeding.

Assertion without evidence. Correlation is not causation.

And you use the exact same assertion without evidence, except you're also using an appeal to authority.

There's plenty of evidence that prices rise after the privatisation of public utilities.

No, it's not. The cost is paid indirectly, but it is still paid. There is no such thing as a free lunch.

Now as for the taxation cost, that's a hell of a lot cheaper than private systems and better quality,

What private systems? Oh you mean the United States? The heavily regulated, mostly state-funded, highly corrupt system that will soon have state-run health insurance? Yeah, that's a private system alright.

Sure, except that non-compliant banks face a 30% tax on every single transaction in and out of the US. The US government could probably even prohibit US banks from dealing with non-compliant banks, which is the kiss of death.

Legally and morally, the US cannot compel foreign banks to obey US laws. But practically speaking, it can.

You're right - foreign banks cannot be COMPELLED to comply with a US law. Indeed, many of them ~cannot~ due to local privacy laws.

However, read the rest of the law and you'll see the issue. Foreign financial entities that do not comply with face a 30% withholding tax on all US-sourced income. And given that virtually every bank on earth trades in a mix of bonds and stocks from all over the planet, a fair proportion of which will be American... the bank suffers a significant financial penalty for non-compli

As an American that has traveled and lived abroad, I can state with some authority that it is often quite nice to be an American when traveling. (This was pre-2K, so there are, ahem, some differences now.) When living abroad I paid my local and home country taxes. It wasn't that difficult. It was very nice, to be honest. As an American, you get a big fat deductible for your tax returns. And the local taxes weren't that bad either.

That said, the intrusiveness and 'do as I say, not as I do' attitude of

One of the reasons companies move overseas is to avoid US taxes on anything they don't bring back to the US, why should actual citizens be any different?

I decide to move to NZ in my retirement. After a lifetime of working sitting on the porch and watching life go by isn't for me so I start or buy a local business. I hire local employees and pay all the required taxes in NZ for the income made there. I pay US taxes on my retirement income derived from US accounts. Why if I'm not sending money back to the US for deposit (which would have to be reported) does the US need to know anything about income derived from the NZ business?

Government is voracious. If a budget is balanced, elected officials quickly unbalance it to buy more votes. The "local maximum" in the political landscape is to run a permanent deficit because you gain more votes that way than with a balanced budget.

It takes an unexpected windfall like the Internet boom to briefly balance the budget. But have no fear! Congress quickly rises to the occasion!

Well yes, but by what stretch of the imagination do people believe this money grab is right? I see multiple posters agreeing with it. For the tax jurisdiction the business is in anyone can see the point, you're operating a business there like anyone else.

I'm at the age where retirement is in sight and have spent a lot of years bitching about US taxes. I've definitely considered moving somewhere that won't take 50+ cents of every dollar I earn, the thought of owning a beach bar in a tropical location not

This has NOTHING to do with "having the cake and eating it", as you said in in your boundless ignorance.

Ordinary US citizens who happen to be living in other countries, like NZ. They don't ask anything of the US, they don't have accounts there, they earn an honest living in their adopted country. No "Fat Cats", no tax cheats, nothing sinister going on. Yet, contrary to almost all civilized countries in the world, the US demands those people to continue to report and file their taxes in the US, forces them t

So you want to keep having the privilege of maintaining the ability to come and go to the US, and do not wish to pay for that privilege?

As you need to earn 6 figures to worry about paying US taxes on your overseas income, this compaint is rather esoteric. ANd, if you wish to avoid US taxes on your overseas earnings, you can do as the one rich kid did to avoid taxes and renounce your US citizenship.

You still need to fill out the forms to prove that you do not earn 6 figures and therefore should not be taxed. Your bank and employer still need to provide information to the U.S. government that they may not want to disclose (and thus it is easier for them to say "you can't bank here" or "you can't work here"). This continues *even after renouncing your citizenship*. The forms are both more complex than the domestic version, *and* you're in a country where 99.9% of tax preparers have no experience with

In no other country on earth does maintaining a right to "come and go" require payment. That's the whole point of citizenship. Why should an American have to renounce that when anyone else in the opposite situation (retiring in America, but originally from somewhere else) would not have to do any such thing?

Also there are numerous situations where expat Americans are liable to pay tax to the US without making six figures. And in some cases, situations where they get double taxed on t

BS. If you are a US Citizen there are services available to you all over the world. If you REALLY want to be in NZ living like a New Zealander, paying NZ taxes, never voting in USA elections, and totally renouncing any benefit from the USA then do the simple thing and be a citizen there. Also note that unless things changed, your *first $90,000* of income are tax free if earned abroad. Not a bad chunk of change.

As many other posters already pointed out: It has nothing to do with paying more or less taxes. It has to do with (a) having complex and complictaded filing requirements, (b) risking heavy criminal fines for even the smallest mistakes, (c) being treated like a criminal even with no wrong doing, (d) suffering disadvantage for employement, banking, business opportunities because of this, (d) the US again appearing like an arrogant bully on the international stage.

1. You assume that it's easy to become a citizen of another country just because you want to. They aren't handed out like candy you know. There are usually set criteria, and these may not be possible to meet.

2. Gaining NZ citizenship wouldn't affect the US citizenship, which would still exist. Renunciation of US citizenship is expensive and the IRS will STILL require you to file for up to 7 years after doing so.

3. The $90k threshold doesn't apply to all income types. Furthermore, in many countries, retireme

One of the reasons companies move overseas is to avoid US taxes on anything they don't bring back to the US, why should actual citizens be any different?

Come again? The differences are huge. Companies are hardly punished for avoiding taxes. In fact, tax offices make special deals with them. This means that somehow the law does not apply to multinationals. Maybe that is why they want to do a crackdown on individuals. Just to show that, despite evidence of the contrary, they seem to be fighting tax evasion.

Here's the thing - the IRS can, and should crack down on tax evasion (i.e. nonpayment of tax in violation of the law). It can't, however crack down on tax avoidance (the legal structuring of one's affairs to reduce tax owed). Multinationals are engaged in large-scale, and entirely legal, tax avoidance. We can work to change the law, thereby closing off the avenues of avoidance, but criticizing the IRS for not going after things like Apple's tax avoidance structures is like criticizing cops for not ticket

My point was that companies are almost encouraged to move operations overseas to avoid taxes as you indicate, however the US now wants to involve the financial industry around the world in making sure that any "US Persons" report and pay taxes on any income earned from overseas business or investments.

My contention is that individuals should be treated the same as the multinationals.

This is just so that they can ensure you are doing what your post says you're doing. This is so that if they audit you they can actually verify your balances and ensure you aren't just hiding money from the IRS. Bank accounts are subpoena'ble records, they aren't private. But subpoenaing international records is tricky--hence treaties.

New Zealand is playing the role of US puppy, as proved the Kim Dotcom house raid [torrentfreak.com], breaking their own laws [techdirt.com] in the process as anyway the priority was coming from outside.

You won't fix US attitude from outside, and if you really want to run, don't do it to one of its own colonies.

Progressives in the US want to "tax the rich" and don't want to let them get off the hook by moving abroad. This kind of worldwide tracking and enforcement is the inevitable consequence.

European nations just let their wealthy move abroad and don't tax them when they're living outside the country. They also don't count them in inequality statistics, which is one reason why European Gini indexes are so low. Maybe a good dose of this kind of European-style progressivism would do the US some good?

I am an American living and working overseas for over half my life. My ties to the U.S. are almost none-existent. My use of U.S. goods and services is possibly even less than many foreigners around the World. Occasionally I might buy a U.S. made product, but that is even rare given the poor quality.

Here are the real effects, and this is just a short list I have time to type.

1. Assumption that all Americans overseas are criminals by definition, even if we did not owe any taxes. The IRS, by their own calculations, says the basic forms will take over 72 hours a year for an American Expat to prepare to properly report their taxes. Most expat tax experts, can not figure them out.

2. Foreign banks are closing or will refuse to open accounts for Americans. I know dozens of real cases already among friends. It is not just American citizens. It is anyone with a U.S. mail address, green card, or any payments transiting the United States to foreign banks. So, yes, many, many none Americans are caught up in this sweep of private information, the majority of which has nothing to do with tax money.

3. The country I live in also has banking secrecy and privacy laws, and as a full resident, it even goes further because in the country where I live it is a constitutional right extended to both residents and foreigners.

4. It also includes any company where an American might be a 10% owner or more, or might have signature authority over the company accounts or other assets. Just think what most international companies are going to do when making a choice between an American employee or CEO vs. a foreigner, as far as disclosing private company information to the U.S. government simply because they have an American working there.

5. It includes disclosing foreign none-citizen none-resident private information to the U.S. government that are family members of an American citizen abroad. For example, a wife or kids account, investments, or pretty much anywhere the American might (you have to prove the negative) have authority over the money . Partnerships of all forms, of all sorts of complexity, are also subject to it. Imagine as a foreigner entering in to a contract with an American citizen, and having to report to the U.S. IRS your private information and dealings. Guess what most foreigners will do from now on to avoid such problems.

6. This includes not only bank accounts, but investments, pensions, insurance policies, various types of contracts. I am not even sure how many insurance policies I have, let alone what would need to be reported. If you are a foreign insurance company, just think how happy they will be to issue a policy to an American client living overseas.

In short, I am forced to obtain citizenship in my country of residency, and give up my citizenship in the United States. It is either that, or say good-bye to my entire life work and return to the United States to starve at some bullshit minimum wage job (I own my own company outside the United States).

Forget the Berlin Wall, what they are building in the United States is far, far more dangerous.

I am an American living and working overseas for over half my life. My ties to the U.S. are almost none-existent. My use of U.S. goods and services is possibly even less than many foreigners around the World. Occasionally I might buy a U.S. made product, but that is even rare given the poor quality.

Here are the real effects, and this is just a short list I have time to type.

1. Assumption that all Americans overseas are criminals by definition, even if we did not owe any taxes. The IRS, by their own calculations, says the basic forms will take over 72 hours a year for an American Expat to prepare to properly report their taxes. Most expat tax experts, can not figure them out.

2. Foreign banks are closing or will refuse to open accounts for Americans. I know dozens of real cases already among friends. It is not just American citizens. It is anyone with a U.S. mail address, green card, or any payments transiting the United States to foreign banks. So, yes, many, many none Americans are caught up in this sweep of private information, the majority of which has nothing to do with tax money.

3. The country I live in also has banking secrecy and privacy laws, and as a full resident, it even goes further because in the country where I live it is a constitutional right extended to both residents and foreigners.

4. It also includes any company where an American might be a 10% owner or more, or might have signature authority over the company accounts or other assets. Just think what most international companies are going to do when making a choice between an American employee or CEO vs. a foreigner, as far as disclosing private company information to the U.S. government simply because they have an American working there.

5. It includes disclosing foreign none-citizen none-resident private information to the U.S. government that are family members of an American citizen abroad. For example, a wife or kids account, investments, or pretty much anywhere the American might (you have to prove the negative) have authority over the money . Partnerships of all forms, of all sorts of complexity, are also subject to it. Imagine as a foreigner entering in to a contract with an American citizen, and having to report to the U.S. IRS your private information and dealings. Guess what most foreigners will do from now on to avoid such problems.

6. This includes not only bank accounts, but investments, pensions, insurance policies, various types of contracts. I am not even sure how many insurance policies I have, let alone what would need to be reported. If you are a foreign insurance company, just think how happy they will be to issue a policy to an American client living overseas.

In short, I am forced to obtain citizenship in my country of residency, and give up my citizenship in the United States. It is either that, or say good-bye to my entire life work and return to the United States to starve at some bullshit minimum wage job (I own my own company outside the United States).

Forget the Berlin Wall, what they are building in the United States is far, far more dangerous.

In short, I am forced to obtain citizenship in my country of residency, and give up my citizenship in the United States.

Not so fast, Round-Eyes. Before you can renounce your US citizenship, you must sign an oath to that effect at an embassy or consulate outside the US, pay a fee of $450 andsettle up with the IRS [renunciationguide.com] first! Only when the latter have agreed that you have nothing outstanding may you no longer call yourself an American. Otherwise, sorry, Bud -- you're still in!

The critical issue here is that we don't know exactly what "US Person" means. Canada is in the throes of the same issue, with the US demanding access to banking records for any US Persons, and the scope of this is troubling.

US Persons includes US citizens, of course. But it includes folks who might be entitled to citizenship through birth or parentage, whether or not they are actual citizens. It would include anyone who has ever resided in the US. And the definition can be manipulated to mean whatever t

Are you implying that people living overseas are tax dodgers? How ignorant! They may be married to someone from that country, may have found work there, or may just like it more there than in the US. There are tons of reasons to be a resident of another country, which have nothing to do with dodging taxes.

Besides: In many cases, the taxes in other countries are higher than in the US. No dodging there.

You'd have to ask the consulate to be sure, but I would be surprised if you'd be denied the same tax breaks residents can get. There are probably some things you can't get if you live overseas, but then, you also benefit a whole lot more from that consulate (for example) than you would if you had stayed in the US.

Make sure you google "Heart Taxation Act" first before you consider giving up your USA citizenship.....
lol the fact that this law was written by Charlie "tax cheating" Rangel and this never gets mentions still continues to crack me up.

If you want to renounce the obligations of citizenship, you must also renounce the benefits of citizenship and officially naturalize as a citizen of another country. Seems fair to me.

Most countries distinguish clearly between being a citizen and a resident. And usually the only thing you can't do as a non-citizen resident is voting or standing in general elections, or sometimes things like joining the army or police force. Everything else, there should be little difference.

It seems that the USA has this weird interpretation that US citizens should have all the legal obligations that US residents should have, even if they are not US residents anymore, including obligations that US residents that are not citizens.

It seems that the USA has this weird interpretation that US citizens should have all the legal obligations that US residents should have, even if they are not US residents anymore, including obligations that US residents that are not citizens.

That's because most expats demand free entry into the USA whenever they feel like it, wave their US passport at border controls when they travel, run to the nearest US Embassy whenever there's trouble, etc.

You should renounce your US citizenship if you want them to stop asking for stuff in return for those privileges.

Oh, how I miss self-righteous Americans. I'll renounce as soon as I have a new passport, thank you very much. In the meantime, perhaps you should consider why other countries don't charge their citizens, who also happily travel home once in while.

You should renounce your US citizenship if you want them to stop asking for stuff in return for those privileges.

For many people, this is not possible. The US government imposes a hefty renunciation tax [wikipedia.org] that can in some cases far exceed a citizen's annual income. If you don't have the money to pay the tax, you must remain a citizen.

Since it is a percentage of your holdings, you should be able to pay the tax if you are, in fact, moving to another country and actually selling everything. If you are changing citizenship in name only and remaining in the US the whole year then, yes, you may have some issues. The law seems pretty carefully crafted to not harm those who are really going to obtain citizenship and live elsewhere and to only target rich guys who are playing games.

You misunderstand. You don't have to sell your assets or anything; they tax you on what you have as if you have sold it right then and there, even without you actually doing so. They could very well be taxing you on money that you don't even have. Suppose you owned a house in France that was worth $500,000 at the time you expatriated (not even necessarily have it paid off, just had a loan on it and *technically* it was yours) that's about $150,000 you now owe the IRS. Don't have the cash to pay that off? Then you must sell something quick, because if you don't pay it off right away then the US will have you extradited and sent to prison, because that law assumes that if you have X amount of assets and renounce your citizenship, then you did it for the purpose of evading taxes.

They quite literally tax you for money or even income that you may not even have. Furthermore, you're also subject to US taxation for a full TEN YEARS after you've renounced your citizenship.

Furthermore, you're also subject to US taxation for a full TEN YEARS after you've renounced your citizenship.

Not limited to just U.S. citizens. I'm a U.S. citizen living in Germany and I'm married to a German. Because my wife lived in the U.S. for about a decade with a green card, I understand that my wife who was never a U.S. citizen has to pay taxes for ten years. WTF? How is that even legal? Why does Germany put up with that? How can the U.S. demand that she pay taxes for ten years?

Maybe, perhaps, she can just "not pay"... but then they'll probably arrest her or me when we visit my parents.

I thought about the idea of taking my SSI payout overseas in some 3rd world country where costs were 1/10th what they are in the US.

I found this is not allowed. If you payed into "your" SS account all your life, and expected to be able to withdraw on it after retirement age -- you could only do so in the US. Apparently, if you move overseas to retire -- you forfeit rights to money you paid into the system (at least while living abroad).

This is NOT about moving overseas and changing citizenship -- but is saying that US citizens can only receive US benefits if they remain in the US where SSI payouts qualify them for living under the US-poverty line.

What's up w/that? Of course many of the same supporters of such inane policies are also against paying benefits to those who immigrate into the US. The SSI rules are setup to prevent payouts to people who might move here to retire -- even if they become citizens, because benefits are based on money you pay in. So how can they justify NOT paying who live outside the US who did work?

If it wasn't the government doing it, it would be called fraud and theft...But in the US, such things as fraud and theft are merely standard policy and law.

If you want to renounce the obligations of citizenship, you must also renounce the benefits of citizenship and officially naturalize as a citizen of another country. Seems fair to me.

Taxation is not an obligation of citizenship, it's an obligation of the consumption of government services. If you don't live in a country, you don't need the services of its government - you don't drive on its roads, you're not protected by its police, fire departments, etc. Civilized countries tax based on residency or sour

But the US is the ONLY country that taxes you on earnings you make overseas while in another country. I mean, not unless you make more than $90k USD a year, but you still gotta file.

I know the argument of "Well embassies" and all those other American benefits (like heath insurance..oh wait...)

NZ taxes your American retirement accounts after you've been here for four years, even if you're not a citizen (just a resident). Seriously? I've already paid taxes on my Roth IRA in one country and I have to pay takes

This isn't about expats living/earning wages overseas, it's about Americans using overseas bank accounts to hide income that they earned in the US, in order to avoid paying taxes on that.

It's causing a lot of upset here in Canada, too, because of our privacy laws, and because the Americans are refusing to give us a reciprocal agreement for Canadians in the US. (on the grounds that they don't enforce foreign laws).

This isn't about expats living/earning wages overseas, it's about Americans using overseas bank accounts to hide income that they earned in the US, in order to avoid paying taxes on that.

It's causing a lot of upset here in Canada, too, because of our privacy laws, and because the Americans are refusing to give us a reciprocal agreement for Canadians in the US. (on the grounds that they don't enforce foreign laws).

In one country where I know how the tax office does it, if they can't get the numbers from you then they estimate. If they can't get the numbers from you in the next year, then obviously the estimate was too low so they estimate a lot higher. On the other hand, they don't tax foreign income. They only add it into the equation for calculating the tax rate for your local income.

This isn't about expats living/earning wages overseas, it's about Americans using overseas bank accounts to hide income that they earned in the US, in order to avoid paying taxes on that.

That might be the way they sell it on that side of the pond, but the fact of the matter is that US citizens living abroad are still required to file, and (generally, if they live in a low-tax country) pay, US taxes. If I in Switzerland earn an income based entirely within the borders of Switzerland, the US still wants a cut, and the law is designed to catch such foreign residents in addition to US residents.

That might be the way they sell it on that side of the pond, but the fact of the matter is that US citizens living abroad are still required to file, and (generally, if they live in a low-tax country) pay, US taxes. If I in Switzerland earn an income based entirely within the borders of Switzerland, the US still wants a cut, and the law is designed to catch such foreign residents in addition to US residents.

And if you're in Switzerland, earning an income in Switzerland, maintaining residence in Switzerland, and paying taxes in Switzerland, on what grounds do the Americans have *any* right to lay claim to your income? Taxes are meant to pay for a government infrastructure and services, and if you're living in Switzerland, you're not actually using any of those services -- at least, none of the ones that aren't paid for with user fees. They have user fees for passport/diplomatic services, which are the only actual government services I could see such a person taking advantage of....

USA is one of the few countries that taxes you on income no matter where you earn it.
They can do it because you are a USA citizen and fall under it's laws and regulation. You can denounce your citizenship if you don't want to pay it; this tends to be reason you do get expats to denounce their citizenship if they can get it from another country.

Unfortunately, it's not that simple.... some of our banks are publicly traded on the American stock exchanges, for example. If our banks want to continue doing business in the US, then they have to adhere to American laws.

We also have a two-faced weasel for a prime minister, a man whose idea of "fiscal transparency" was putting a see-through window in the new money when they redesigned it a couple of years ago. And unfortunately, due to voter apathy, the fucker actually got a majority government too (seriou

It might not be "about" expats, but it hurts them. I know - my wife is a dual Australian and American citizen. She hasn't set foot on US soil in a decade but still has to declare her worldwide (i.e. Australian) income every year and file her US tax return. Not only that, she has to report the details and balances of all her bank accounts, every year. And because some of those accounts are jointly held with me (a non-US citizen), then guess what, the US has my details as well.

No it's about the bloody paperwork involved. It's ridiculous. Yes we may end up owing nothing to the IRS but the administrative burden is huge (or you pay someone else to do it for you).

Secondly, your example works ok for a simple tax situation (earned income from a job), but let me tell you it gets complicated when you start throwing in franked dividends (the US doesn't recognise imputation credits, so you end up getting double taxed on these). Or foreign retirement accounts (which are taxed by the host co